1
Q
idea is to
A
promote competition = greater efficiency + innovation
2
Q
Show graph of switch from
A
Pm to Pc, increase CS gains + no DWL loss of Pm output
3
Q
adv
A
- More firms mean increase consumer choice + incentive for AE
- Higher PE AND XE
- Higher Dynamic efficiency as profits can be reinvested, due to competition so long term reduction in costs
4
Q
disadv
A
- Loss of natural monopoly
- Formation of oligopolies and local monopolies
5
Q
depends on
A
- Short run vs long run contestability
- Height of other barriers to entry
- Level of government regulation
ECON MICRO
flashcards
Decks in class (34)
# Cards
-
law of diminishing returns7
-
Fixed and Variable costs (AFC, TFC, AVC)9
-
Marginal and Average Cost Curves4
-
Total cost curves – TC, TVC, TFC2
-
LR costs and returns to scale6
-
Economies of diseconomies of scale17
-
Revenue – MR, AR + TR7
-
Profit – normal, supernormal (abnormal) and subnormal14
-
Objectives of firms – profit max, rev max, sales max, satisficing23
-
Barriers to entry and exit7
-
Business efficiency6
-
Efficiency analysis8
-
Business Growth35
-
perfect competition10
-
Perfect competition - Shutdown points3
-
Monopoly21
-
price discrimination9
-
competitive markets4
-
Monopolistic competition8
-
concentration ratios2
-
oligopoly20
-
contestable market7
-
competition policy17
-
Privatisation3
-
deregulation5
-
nationalisation3
-
Labour46
-
reasons for business growth and types of firms7
-
business growth13
-
Monopsony13
-
government intervention in product markets23
-
competition, protecting suppliers and workers17
-
regulatory capture3
-
non price competition9
